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Ahead of Market: 12 things that will decide stock action on Wednesday

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Ahead of Market: 12 things that will decide stock action on Wednesday

MUMBAI: Nifty50 is likely forming a triangular formation on the daily chart on Tuesday as the benchmark index rose after two sessions of losses and managed to recoup all of the loss from the previous day.


Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said that in terms of the price pattern, Nifty50 has the potential to form a base triangle, which means that the sideways action can continue further before the index prepares for a larger up move.

Mazhar Mohammad of Chartviewindia.in said Price action of the last couple of trading sessions is hinting that Nifty might have entered a high volatile phase where big single-day directional moves failed to attract follow-through action.

That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:


Big Tech, chipmakers power Nasdaq


The Nasdaq rallied more than 2 per cent on Tuesday as technology firms bounced back on easing concerns around the Omicron variant, while Intel jumped after plans to take its self-driving car unit public. At 9:52 a.m. ET, the Dow Jones Industrial Average was up 439.49 points, or 1.25 per cent, at 35,666.52, the S&P 500 was up 78.04 points, or 1.70 per cent, at 4,669.71, and the Nasdaq Composite was up 361.97 points, or 2.38 per cent, at 15,587.12.


European benchmarks leap higher

Waning Omicron variant worries lifted European stocks on Tuesday. Pan-European STOXX 600 index leaped 2.46 per cent while London’s FTSE 100 index jumped 1.49 per cent.


Tech View: Consolidation on the offing


Analysts suggested that despite Nifty50 crossing the 100-day moving average today, it does not provide sufficient evidence for the gains to continue. The lower top and higher bottom formation for Nifty50 suggests that the index may remain in a consolidation zone for the time being.


F&O: Gains likely to continue


In the derivatives segment, traders covered their short positions in the out-of-money call options of the Nifty50 index suggesting that more gains could be on the offing in the coming sessions. However, there was the unwinding of long positions beyond the 17,500 strike price call option by traders that hints at low confidence for any reversal in trend.


Stocks showing bullish bias


Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of YES Bank, Urja Global, Hindalco, Hindustan Copper, and Axis Bank.

The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.


Stocks signalling weakness ahead


The MACD showed bearish signs on the counters of JP Associates, Biocon, Aurum Proptech, Syngene, and Elecon. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.


Most active stocks in value terms


ICICI Bank (Rs 2228 crore), Kotak Bank (Rs 1428 crore), RIL (Rs 1238 crore), Axis Bank (Rs 1033 crore), Tata Motors (Rs 1017 crore), Tata Steel (Rs 970 crore), HDFC Bank (Rs 947 crore), Indiabulls Housing (Rs 886 crore), JSW Steel (Rs 848 crore) and Vodafone Idea (Rs 841 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.


Most active stocks in volume terms


Vodafone Idea (Shares traded: 57.8 crore), YES Bank (Shares traded: 31.8 crore), NALCO (Shares traded: 6.6 crore), SAIL (Shares traded: 5.4 crore), Zomato (Shares traded: 3.7 crore), HFCL (Shares traded: 3.6 crore), Tata Power (Shares traded: 3.6 crore), Indiabulls Housing (Shares traded: 3.5 crore), and PNB (Shares traded: 3.2 crore) were among the most traded stocks in the session.


Stocks showing buying interest


Torrent Power, Home First Finance, BSE, Tanla Solutions, Brightcom Group and Adani Gas witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.


Stocks seeing selling pressure


Mahanagar Gas, Lupin and Whirlpool India witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.


Sentiment meter favours bulls


Overall, the market breadth remained in favour of the bulls. As many as 399 stocks on the BSE500 index settled the day in the green, while 101 settled the day in the red.


Podcast: Can D-St’s momentum sustain going ahead?
Investors added about Rs 3.5 lakh crores in their notional kitty. BSE barometer, Sensex, rose about 1,160 points to scale the intraday low. However, it rose about 900 points to end the day just below 57,650. Its broader peer, Nifty50, gained 265 points to settle a dozen points above the 17,175 mark. It had crossed the 17,250 level during the session’s trade but eased 75 points from the day’s high. Can Dalal Street’s momentum sustain going ahead?

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